Peel Amazed US Beef Exports Remain Strong In Spite Of Record Prices

By Derrell Peel

The cattle market is wrapping up an incredible year. In looking back at 2014, Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel said one of the aspects of the very strong year for cattle prices in this country are international trade.

He said export values are helping underpin the move higher on these overall cattle prices. Similar to domestic demand, the US continues to see remarkable strength for beef exports. For the month of October, year over year, Peel said beef exports were down about three point four percent, but for the year to date, exports were up half a percent, basically unchanged from a year ago. Peel said exports have been up and down over various months.

"The bottom line is, given the prices levels that we are seeing, I think its surprising that exports are holding as well as they are," Peel said.

In terms of exports Peel said it's a mixed bag. Canada is off the most as a major export designation, Japan is slightly lower than a year ago, Mexico is up for the year, while South Korea and Hong Kong are both up strongly for 2014. On a month to month basis, Peel said each one of the countries have had swings in exports being higher or lower than a year ago.

Overall export volume is close to last year's levels, but export value is much higher than a year ago because of the higher US beef prices. Peel said one the key markets that is really starting to have impact on globally on beef demand is mainland China. While technically the US does not have access to that market yet, Peel believes some US beef is getting into China through Hong Kong and Vietnam. In looking at Australia, he said clearly China is a major driver in the increased global demand for beef.

In looking at the beef supply situation, part of that comes from importing Mexican feeder cattle. Mexican cattle imports into the US increased in 2011 and 2012 due to the drought liquidation as well as the relatively strong cattle markets in the US. He said Mexico was liquidating because of the same drought problems those year. In 2013 import levels dropped sharply, as Peel expected. This year Mexican cattle imports are up about 13 percent, which is stronger than anticipated.

"But, I still think its a case of sort of, when do they run out of cattle?," Peel said. "...Obviously the record prices in the US is a strong attraction for cattle to come from wherever they can, but when you look at the composition of the imports from Mexico in percentage terms, its is more spayed heifers than it is feeder steers and I think again we are reaching the end of those supplies."